Deadline extended by a month, scheme fetches Rs 930m

VDIS Update:

Property Disclosed: Rs 9.30 billion

Total Revenue Collection: Rs 930 million

Tuesday´s collection: about 600 million

Highest disclosure so far: Rs 150 million

KATHMANDU, Feb 11: The government has extended the deadline of Voluntary Disclosure of Income Scheme (VDIS) for a month after the business community sought additional time. [break]

"The deadline has been extended until March 13, 2009," said a government source, who elaborated that the decision to this effect was taken at a special meeting held after the closure of Wednesday´s business.

Earlier today, Finance Minister Dr Baburam Bhattarai had indicated of possibility of extending the deadline.

The business community had strongly pushed for the extension of VDIS deadline for two more months, which was otherwise ending Wednesday. On the day, they had even met with Prime Minister Pushpa Kamal Dahal to lobby for the extension of the deadline.

The government announced VDIS in this year´s budget in October, 2008 in a bid to give opportunity to the people, who amassed property without paying due taxes, to pay taxes and legalize their property.

It promised not to seek the sources of the income thus disclosed in a bid to lure people to come into the tax net.

"We are glad that the government heard our voice," said Surendra Bir Malakar, president of Nepal Chamber of Commerce at the end of the meeting that took the extension decision. "We still have numerous issues to be cleared, like whether the initial investment of the tax-paying venture should come under VDIS. We are meeting again on Sunday to sort those out," he told myrepublica.com.

By 7 p.m. Wednesday, the government mobilized Rs 930 million in revenue under VDIS. More than 1,800 people took benefit of the scheme and legalized their property worth Rs 9.30 billion, paying 10 percent tax to the government, according to Bishnu Nepal, chief of VDIS unit at Inland Revenue Department (IRD).

On Wednesday alone, about 1,000 taxpayers disclosed property worth about 6 billion.

"That fetched us revenue of some Rs 600 million today alone," said Nepal.

Moreover, in a bid to meet the VDIS´ revenue target of Rs 2 billion, IRD has said it would continue to counsel the taxpayers – send SMS, make calls and forward them the reminder emails and letters – to come under the tax net.

The government, however, has warned people who refuse to take benefit of the scheme, of tougher actions like confiscation of property and fine and penalty up to 100 percent.

"We have already generated a list of the people who should come under VDIS. If they refused to take benefit of the scheme, we will take tough actions like confiscation of property and fines and penalty up to 100 percent," said Kapil Dev Ghimire, director general of IRD.

milan@myrepublica.com